With boomers downsizing, and Gen X-ers opting for less-cluttered lifestyles, homes the size of walk-in closets are fast becoming a more appealing, money-saving alternative. But that doesn't mean smaller has to be more austere. Simple, more affordable and ecologically-friendly, the latest in tiny-house design proves compact-home living can still be just grand.

"It’s the details that make the house,” says Tor Barstad, high-end architect and co-owner of the Albany, Oregon-based Tiny Smart House Company. Barstad, who regularly masterminds layouts for sprawling McMansions, applies the same luxury styling to smaller-scale structures. His tiny 212-square-foot craftsman-style home model, for example, features upscale flourishes like a vaulted ceiling with a tongue and groove wood finish, a large skylight and double French doors. “It can be designed inside to make you feel like you are in a bigger space,” says Barstad who charges around $24,400 for a smart home.

The mini-homes by Tumbleweed Tiny House Company, range from a cozy 65 square feet to a whopping 777 square feet. Its catalog collection includes everything from build-it-yourself box bungalows and portable houses-to-go with wheels, to two-bedroom cottages and modern studios. Over the last 12 years, Tumbleweed founder Jay Schafer has sold 12 houses and 1,500 sets of plans. He's currently in negotiations to build a “trailer park” of tiny homes in Sonoma Valley, California.

Small can be cozy and romantic, but not necessarily always cheap. Tucked down a garden path on a cul de sac in San Francisco, awaits a fully-furnished “luxury jewel cottage” for $985,000. With 435 square feet, a sizable bedroom and bath with a glass-block shower, the copper-shingled cottage is far more than quaint. An alternative to a city condo, Sotheby's Linda Harrison says it’s “like trading down to trade up." The getaway home touts a designer kitchen with Italian cabinetry and a sculpted, oblong banana-yellow center island for storage. "Not only does it have everything but everything is really well done," adds Harrison. “It is totally dreamy.”